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How the Chip Shortage Is Affecting Telecom

By September 15, 2021No Comments
Intel computer processor in selective color photography the chip shortage is affecting telecom

Ever since Covid-19 hit the world with its unprecedented incoming, there has been a global semiconductor chip shortage. As a result, many industries around the world are suffering. Some are even feeling handicapped as they continue waiting for the producers to catch up. For example, the gaming industry is currently under great strain as many customers are still waiting for their new Play Station or Xbox to come in. Automakers, such as General Motors, had to reduce and actually pause production for a certain time as they simply could not continue without the needed semiconductor supply. But what about the telecom industry? How is this chip shortage affecting telecom?

Record Sales but Low Inventory in Devices Due to the Chip Shortage in Telecom

With countries such as China and Australia still remaining under strict lockdown regulations, the demand for devices has been rapidly rising. More and more employees and students are adapting and even fully converting to mostly-online production and consumption.

Consequently, the sales in laptops, iPads and iPhones have been surging, since these devices have literally become essential to so many globally. In fact, Apple’s income in the first quarter of 2021 was 54% higher than it was in 2020. It sold a staggering $90billion in just the first three months of the year. But as the chip shortage began affecting its production as well, even Apple expected to be hit by a revenue loss of at least a few billion dollars in the following quarters of the year.

Naturally, this device shortage affects the telecom industry. The fewer devices the consumer has the fewer telecom services are needed. The less production the less consumption.

Network Construction Delays

Earlier this summer, the NTCA wrote a letter to the FCC. In this letter it highlighted the severe side effects and security concerns that the chip shortage is creating within the telecom industry. It brought attention especially to the network construction delays currently experienced.

The domino effect of the chip shortage has created an electronic and fiber equipment shortage. Because of equipment shortages, the telecom industry is seeing delays of over 12 weeks in network construction.

These network construction delays are limiting the availability of high-speed internet access to Americans all over the nation. The equipment shortages are also potentially putting telecom’s security and well-being at risk. If the delays are so great in the initial construction, what kind of delays will be experienced in case of disruptions caused by either cyber-attacks, weather or equipment malfunctions?

The Chip Shortage Is Affecting Telecom

What we are seeing is that semiconductor chip producers simply do not have enough of the necessary equipment and tools needed today to supply the compounding demand from the consumers. This is causing major delays in the production of telecom services, devices and equipment. This is also creating an increase of cost to the producers and the consumers. The prices are shooting up while the inventory is crashing down. This chip shortage is affecting telecom production quantity as well as quality. Therefore, the chip shortage is affecting the entire telecom industry.

 

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